ECB EURO Interest Rate Decision | How to trade EURUSD? Analysis by Piyush Ratnu
The European Central Bank (ECB) will have its first monetary policy meeting of the year on Thursday, but little is to be expected from European policymakers. The Main Refinancing Operations Rate will likely be maintained unchanged at 4.50%, and the Deposit Facility Rate at 4%. If something is, the central bank will continue “tightening” through the reduction of reinvestments in the Pandemic Emergency Purchase Programme (PEPP).
As per Economists at TD Securities:
Base Case (65%)
The ECB delivers another hold and makes no major changes to the press statement. The Governing Council emphasizes its broad reaction function and reiterates the importance of economic data in determining the ECB's policy stance. President Lagarde suggests that cuts are likely to come around the summer. That said, the President makes it clear that the exact timing is still very much up in the air, and will ultimately be decided by the data. EUR/USD -0.15%.
Hawkish (30%)
In a hawkish turn, President Lagarde pushes back hard against discussions about the potential timing of rate cuts. Lagarde argues that cuts will come, probably some time this year, and while market pricing looks too dovish, it is too early to comment on when cuts are likely to come. While inflation developments have been promising, Lagarde stresses that the tight labour market adds upside risks to the policy outlook. EUR/USD +0.75%.
Dovish (5%)
Despite recently pushing back against market expectations for spring cuts, President Lagarde fails to do so at the press conference – seemingly offering some credibility to market bets. EUR/USD -0.50%.
EURUSD under PPZ: avoid entries
ECB interest rate decision is scheduled at 15.15 hours, followed US GDP, Core Durable Goods Orders at 17.30 and press conference at 17.45 hours. Further ECB P speech is scheduled at 19.15 hours.
A dead price trap zone might be witnessed followed by a sudden spike/crash, hence kindly follow PRSR W1 strictly on XAUUSD, USDJPY and EURUSD.
🟥 EURUSD: PRSRZ
S2: 1.07979
S3: 1.07219
S4: 1.065750
R2: 1.09967
R3: 1.10727
R4: 1.11196
EURUSD: Expected recovery (50%) of crash/rise: 9 trading days.
The European Central Bank (ECB) will have its first monetary policy meeting of the year on Thursday, but little is to be expected from European policymakers. The Main Refinancing Operations Rate will likely be maintained unchanged at 4.50%, and the Deposit Facility Rate at 4%. If something is, the central bank will continue “tightening” through the reduction of reinvestments in the Pandemic Emergency Purchase Programme (PEPP).
As per Economists at TD Securities:
Base Case (65%)
The ECB delivers another hold and makes no major changes to the press statement. The Governing Council emphasizes its broad reaction function and reiterates the importance of economic data in determining the ECB's policy stance. President Lagarde suggests that cuts are likely to come around the summer. That said, the President makes it clear that the exact timing is still very much up in the air, and will ultimately be decided by the data. EUR/USD -0.15%.
Hawkish (30%)
In a hawkish turn, President Lagarde pushes back hard against discussions about the potential timing of rate cuts. Lagarde argues that cuts will come, probably some time this year, and while market pricing looks too dovish, it is too early to comment on when cuts are likely to come. While inflation developments have been promising, Lagarde stresses that the tight labour market adds upside risks to the policy outlook. EUR/USD +0.75%.
Dovish (5%)
Despite recently pushing back against market expectations for spring cuts, President Lagarde fails to do so at the press conference – seemingly offering some credibility to market bets. EUR/USD -0.50%.
EURUSD under PPZ: avoid entries
ECB interest rate decision is scheduled at 15.15 hours, followed US GDP, Core Durable Goods Orders at 17.30 and press conference at 17.45 hours. Further ECB P speech is scheduled at 19.15 hours.
A dead price trap zone might be witnessed followed by a sudden spike/crash, hence kindly follow PRSR W1 strictly on XAUUSD, USDJPY and EURUSD.
🟥 EURUSD: PRSRZ
S2: 1.07979
S3: 1.07219
S4: 1.065750
R2: 1.09967
R3: 1.10727
R4: 1.11196
EURUSD: Expected recovery (50%) of crash/rise: 9 trading days.
